#24 VC CFO Insights From Weekend Fund

Gm crew! Remember, you can’t spell “fund finance” without “FUN.” 🚀

Welcome to the new members of @TheFundCFO crew! Every [week] or so (#goals), we’ll bring you actionable tools, real-world experiences, and insider insights for #VC CFOs and fund managers, #LP investors, and general industry enthusiasts/people who want to learn :).

Share this on Twitter or LinkedIn to help grow the crew. Or check out our prior newsletters and insights here. We appreciate you!

Today’s Top 3:

• Crowdsourced knowledge FTW! I’ve been super impressed by VC CFO insights from Signature Block by The Weekend Fund. VC terms, LP updates, and avoiding top mistakes are packed w/ insights from GPs and LPs. Nice work.

• VC terms matter. Every CFO should know K-1, DPI, TVPI, LPAC, and other key terms. See below for the ones that matter most.

• Ownership, doubling down, and portfolio construction are key areas where early fund managers make mistakes! Avoid this by having a thoughtful, detailed plan with your CFO day one. Then go execute.

VC Terms That Matter (Most) to the CFO

There are a lot of terms to get familiar with as a VC CFO or fund manager. From the CFO’s seat, these are the ones that we deal with most frequently:

• Capital call: money you “call” from your investors to invest, typically once per quarter. We’ve written about quarterly budgeting and cash flow forecasting.

• Portfolio construction: a combination of variables that make up each fund. We’ve talked a lot about this in our fund model and prior posts.

• Reserves: money you save to invest again in your best companies. Correctly planning this in your fund model can take your fund from average to great!

Avoid Ownership, Doubling Down, & Portfolio Construction Mistakes

VC fund managers and CFOs can make a lot of mistakes in the early days! Here are the specific examples that we’ve seen the most:

• Ownership: you must have enough ownership in your winning companies to RTF (Return the Fund)! Venture capital is a hits-driven business.

• Not Doubling Down on Winners: “We've missed out on tremendous financial upside by not doubling down on portfolio startups that went on to become multi-billion dollar companies.” Enough said.

• Portfolio Construction: “have a clear portfolio construction that matches your strategy and capabilities.” A clear blueprint is critical here.

That’s all for today folks! Thanks for your support and spreading the word! Share this on Twitter or LinkedIn to help grow “the crew!”